• Mobile VAS sales increased 13% in Mexico compared with the same period last year;
• Mobile internet access now accounts for 32% of VAS sales in Mexico;
• 53% state they need SMS, despite smartphone owners having access to OTT messaging services;
• 98% of smartphone owners use more than one instant messaging application; 89% of smartphone owners also use SMS;
• Operators can carve out new services and add-ons, which combine all consumer requirements, while improving user satisfaction, stickiness and revenue.
This is the first of three reports looking at the VAS trends across Latin America, with particular focus on Mexico, Brazil and Argentina; the latter two of which will be launched next week.
The research revealed that with the universal availability of 3G networks, alongside increased adoption of lower cost smartphones, and the roll out of high-speed fibre and LTE (4G) networks, accessibility to the internet, web services and applications has increased considerably, boosting VAS usage in the market. Analysing the second quarter (Q2) 2013 (April June), MAVAM shows a 10% year-on-year increase (MEX$) on mobile business net sales to $MEX 57.05 billion (USD $4.57 billion), of which VAS represented $MEX 15.09 billion (USD $1.21 billion), a 13% increase on the same quarter the previous year and representing 33% of service sales.
Mobile internet connections experienced the biggest growth (51%) in VAS compared to the same quarter in 2012, generating revenues of $MEX 4.89 billion (USD $0.38 billion), and accounting for 32% of all VAS with many believing this is just the beginning of this upsurge. Messaging services on the other hand, including SMS and MMS, generated $MEX 7.77 billion (USD $0.62 billion) for Mexican operators in Q2, representing 52% of VAS sales, but with no increase in revenue on Q2 2012 almost certainly due to the reduction in connections and changes to pricing packages which now focus on bundling large numbers of SMS instead of charging per message.
“Looking at the overall Latin America (LATAM) market, VAS revenue grew by 24% to around $7.7 billion USD ($MEX 95.66 billion), representing 35% of operators’ total revenues and proving that accessibility to internet-enabled devices is opening the door for many new applications which are changing the way mobile users connect and communicate the knock on effect being new revenue streams,” said Fatima Raimondi, Senior Vice President and General Manager of Acision, Latin America. “When comparing Mexico with the rest of LATAM, MAVAM indicates that in line with the flourishing smartphone market uptake of VAS is still rising significantly, particularly for new services.”
“While traditional messaging services (text and picture messaging) may have reached their peak in terms of revenue, when speaking to operators in the region they agree that these services remain important for more than 80% of the population that don’t have a smartphone yet. The majority believe it will remain a stable service for some time to come and are activating new, appealing services which enrich SMS to drive up incremental revenue and subscriber loyalty,” continued Raimondi.
The report highlights some of SMS-type services operators can and are deploying and the consumer reactions to these. Services such as message delivery notification, Collect SMS, auto-reply, and black and white listing some of which are already present in Mexico triggered high interest, showing that if operators launched this functionality it would fit with consumer expectations.
New mobile internet services and application usage is also accelerating, with the research results demonstrating that 98% of smartphone owners use more than one instant messaging (IM) service. WhatsApp (84%) is the most popular IM application, followed by Facebook (70%) and Twitter (43%). This is a global trend, one where we are seeing consumers messaging more over multiple applications and devices where services co-exist to fulfill all consumer expectations across reach, reliability and enriched features which today are not achieved by any one single service.
In the case of smartphones users, there is already high dependency on over-the-top (OTT) / IM platforms, with 76% commenting that the lack of service would represent a problem and 26% claiming they would be lost without it. Regarding the use of picture messaging (MMS), 69% of respondents used multimedia messaging at least once in the last three months, which is high compared to previous MAVAMs, and particularly high amongst smartphone users at 78% usage.
Raimondi, stated: "With the evolution of messaging services and the growing requirement by mobile users for richer services where they can share more content, such as pictures, audio and videos, the time is ripe for operators to address these needs with new, innovative services. The use of picture messages is evidence of this, where users have a desire to continue to share content, whether they have internet access or not, due to the social media and content sharing age we now live in.”
“Globally, we are witnessing operators take a number of approaches to fulfill user requirements, either by enriching SMS services, partnering with OTT partners or by launching their own Rich Messaging, OTT or RCS type services. This may one day lead to a single access point for all messaging services. We believe operators are in a unique position to carve out new services and add-ons, which combine all the elements consumer demand, while improving user satisfaction, stickiness and incremental revenue generation. However, success will be based on the ability to satisfy the majority. Acision is poised to play a leading industry role in accelerating the delivery of richer, IP-based messaging services, and ensuring operators can provide a superior seamless experience for all," concluded Raimondi.
When questioned about such operator-led IP messaging services, referring to the GSMA’s RCS initiative, branded “joyn”, respondents showed a hypothetical acceptance to this with only 12% of those questioned stating they would not use it. This again reaffirms that, while OTT app usage is escalating, a single service from an operator would have a place in a market overcrowded with new applications and too much choice.
To learn more about the MAVAM 2013 research produced in conjunction with Convergencia Latina and view the full report, please contact corporatemarketing[.]acision.com.
Mario Juvera - Director Agency Of Communications Services
T: +52 55 32 65 1333 - E: mjuvera[.]acommunications-mexico.com.